Sunday, September 27, 2015

Farmers Indexed Universal Life Insurance

Financial options. Financially savvy people know that the key to having options is to start early and have a mix of short-term and long-term, and lower-risk and higher-risk tactics in their financial game plan.

Life insurance is, first and foremost, a way to help protect your assets by replacing the income that makes your family’s lifestyle possible if something happens to you. But it can also be one step toward helping secure the financial options you want.

Indexed universal life insurance is a long-term insurance tool that combines the end-of-life death benefit offered by permanent life insurance with potential for cash value growth linked to a stock market index. Indexed universal life may offer advantages for people who want a lower-risk choice for their cash value than variable universal life insurance, but with potentially higher returns than traditional universal life insurance.

How indexed life insurance works
To understand how indexed life insurance fits into the spectrum of life insurance available, it's helpful to understand some life insurance basics.
There are two main types of life insurance: term and permanent.

Term life insurance is underwritten for a specific period of time, typically from five to thirty years, and the premium will increase if the policy owner wants to keep the policy in force after the initial term period has ended.

Permanent life insurance can insure you for a lifetime1. The most common forms of permanent life insurance are whole life and universal life.

To help customers afford life insurance coverage later in life when the risk is higher, permanent life insurance policies have a generally income tax-deferred2 cash accumulation feature that’s not available in most term policies. A portion of your premium payment goes toward cash value that may grow over time.

This cash value is primarily intended to help you cover the future cost of the policy as the cost of insurance goes up with age. However, the cash value can be borrowed or taken out (surrendered)3 for any use, and the death benefit remains guaranteed according to the terms of the contract and provided that premiums are paid.

Whole life insurance generally has a level premium and guaranteed level death benefit, while universal life has additional features including flexible premiums4 and face amounts to meet your changing needs.

There are three main kinds of universal life insurance: traditional, variable, and indexed.

Traditional universal life is designed to help you meet your current and future life insurance needs as your life changes – through marriage, parenthood, job promotions, retirement and more. You decide when and how much premium to pay, within policy limits, allowing you to build cash value faster when you have funds available, or temporarily suspend premium payments if times are tight. The policy’s cash value is guaranteed to earn a minimum interest rate, and may earn a higher rate depending on the company’s investment returns.

Variable universal life insurance has the same flexibility as universal life, plus an investment feature. The investment feature typically allows you to allocate your cash value to a broad choice of market-based "subaccounts." Variable universal life has the most potential for gain of any of the universal choices, but the subaccounts are also vulnerable to market fluctuations – when the market goes down, so does the value of subaccounts invested in the market.

Indexed universal life provides you the opportunity to allocate your premium into accounts whose returns are linked to the performance of specific market indexes. This money is not invested directly into the market. Instead, the insurance company monitors the performance of the indexes and calculates a credit based on that index’s annual percentage change. This can lead to gains in the cash accumulation account if the indexes perform well.

But what if the index performs poorly? Luckily, indexed policies usually include features that shield policy owners from losses due to a market decline. In exchange for this protection, most indexed policies are also subject to a cap on gains. Most indexed life insurance policies also offer a fixed account that policy owners can choose, which is guaranteed to grow by at least a minimum interest rate regardless of market performance.

There’s a popular adage in the life insurance industry: the best time to have started preparing for the future was 20 years ago. The second-best time is today.

Maybe you’re balancing a mortgage, saving for your children’s education, and looking ahead to retirement. Because of its versatility and generally income tax-deferred growth, and generally income tax-free5 distributions and death benefits, indexed universal life can help meet the needs of customers like you and me – customers with families, who may have full-time jobs or own small businesses.

Call me, at Farmers Insurance - The Wertzberger Agency, to talk about all of the ways Farmers Life can help you protect your financial assets and help secure your family’s financial future at 913-383-3276 or by email HERE



Your Farmers agent may only sell policies in states in which he or she is licensed.
Farmers New World Life Insurance Company is not licensed to sell life insurance, accident and health insurance, or annuities in the state of New York.

1Lifetime coverage is guaranteed as long as all premiums are paid to keep the policy in force.
2For informational purposes only. In general, partial withdrawals from a permanent life insurance policy in excess of the policy’s basis are taxable, and limited circumstances exist where death proceeds will be taxable. Neither Farmers New World Life Insurance Company, its employees nor its Agents provide legal or tax advice. Always consult your own attorney, accountant or tax adviser as to the legal, financial or tax consequences and advice on any particular transaction.

3Policy loans and withdrawals will reduce cash surrender value and death benefit. Policy loans are subject to interest charges. If your policy is a modified endowment contract, loans and withdrawals may be subject to taxes and penalties.

4This policy may lapse if premiums are not paid or if premiums are not sufficient to continue coverage.

5Distributions from a life insurance policy in the character of partial surrenders (withdrawals) up to basis or policy loans will generally be income tax free, provided the policy does not violate Modified Endowment Contract (MEC) guidelines and the policy is not terminated during the lifetime of the insured.  MEC guidelines are rules in the Internal Revenue Code which specify maximum premiums that can be paid without triggering adverse tax consequences for withdrawals. A policy termination during the life of the insured can cause the owner a single taxable event for any gains in the policy that were borrowed or withdrawn on or before the termination date.

Tuesday, September 8, 2015

Ways to Cover the Cost of Life Insurance

Many people may they think they have a good understanding of life insurance. Often, this may not be the case. When asked how much they thought life insurance would cost for a year, 80 percent of those who answered a recent survey overestimated the cost of term insurance1 by more than twice what it really costs. The primary reason many people hesitate to purchase life insurance is the belief that it’s too expensive. That’s unfortunate considering that life insurance can help protect the financial future of your family should something happen to you. When you look at the numbers, the cost of coverage should not be a barrier for many people.

For example, a healthy 30-year-old man can get $250,000 of term coverage from Farmers New World Life Insurance Company for $22.68 a month2. With the average monthly cost of $613 for a cell phone, or $644 for a cable subscription, life insurance is a relative bargain. As you can see, life insurance can be affordable.

Here are some money-saving ideas to consider that can benefit many areas of your life in addition to helping cover the cost of life insurance:

Create a budget. Track your expenses: knowing where your money is going may help you identify areas where you can easily reduce your spending. There are many free money management tools and apps that can assist you with this.

Quit smoking. It benefits your health, and a pack-a-day smoker can save over $2,000 per year based on the average cost of a pack of cigarettes5. Non-smokers can also expect lower life insurance rates – all other factors being equal – than smokers.

Bring your lunch to work. By not spending just $5 a day you are looking at saving about $1,200 a year. You don’t have to bring your lunch every day: even bringing your lunch every other day can result in savings that can help cover the cost of a life insurance policy, and possibly even more.

Eat out one less time per month. If it costs you about $30 on average each time you go out, reducing this number by once a month will allow you to save over $300 a year.

Bring coffee from home.  Do you spend $3 a day on coffee during the work week? If so, this can add up to $720 per year. Cutting this number in half can result in significant savings.

Save your loose change. It may not sound like much, but setting aside fifty cents a day over the course of a year will allow you to save more than $180.

Take advantage of all company benefits and discounts. Your company may offer corporate discounts on gym memberships, cell-phone data plans, hotels, concerts, etc. that can help you save.

Organize your closet. This can have a number of advantages. You can save time in the long run knowing where everything is located, and you may find forgotten items, reducing the need to purchase new ones. Consider consignment for items you no longer want to keep.

Research major purchases. Check product reviews, price comparisons, features, and other aspects of any product you are looking to purchase. Wait for sales for additional savings and discounts. A little research and timing can save big $$$ on a purchase.

Start small to save big
Starting with some small steps, you can easily find the money to pay for life insurance. The hardest part of any change is getting started. Once you do, things usually start to fall into place, the process becomes much easier, and you can begin to recognize the positive impact it has on your life.

Life insurance can positively impact your life by providing you comfort in knowing that it will help support your family financially in what may be a distressing and uncertain time. While no one likes to think about a time when they can no longer care for their family, your family’s needs will still be there even if you are not.

Contact me today to discuss your options regarding life insurance and how it can help you and your family. You can reach Farmers Insurance - The Wertzberger Agency by calling 913-383-3276 or by email HERE


1 Data from the 2015 Insurance Barometer Study by Life Happens and LIMRA.
2 Policy form 2000-230 or applicable state variation. Rate is based on a 20-year Farmers Value Term, 30-year-old male, non-nicotine Platinum Elite underwriting class. Electronic Funds Transfer required. Issuance of a policy and rates are subject to underwriting guidelines and approval. Premiums are subject to change after the initial term period.
3 New Street Research, The Wall Street Journal, March 9, 2014
4 Report on Cable Industry Prices, Federal Communications Commission, May 16, 2014
5 http://www.cdc.gov/tobacco/data_statistics/tables/economics/infographics/index.htm
Your Farmers agent may only sell policies in states in which he or she is licensed.
Farmers New World Life Insurance Company is not licensed to sell life insurance, accident and health insurance, or annuities in the state of New York.
Life insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.

Tuesday, September 1, 2015

Benefits of a Farmers Friendly Review®

There are numerous benefits to having a Farmers agent — one of the most important can be the Farmers Friendly Review (FFR). A Farmers Friendly Review includes quality review and customer service regarding insurance and coverage options. Take Chris, a married man with 2 children. Chris has his auto and home policies with Farmers.  He wants to keep his family and assets protected now and in the future. Chris felt his current coverage was adequate for his situation when he first bought the insurance but wanted to be sure it was still adequate for his family situation. He received an email from his Farmers agent prior to his one-year anniversary as a Farmers customer and he contacted him to discuss his insurance program. “I accepted my agent’s offer of the Farmers Friendly Review, which was easy and convenient to do.”

Chris scheduled his review with Farmers agent Michael Lambert. Michael analyzed the situation and identified some potential gaps that had developed because of changes to Chris’ household. Michael identified some options that would be beneficial to Chris. “My agent reviewed my coverage selections and explained some reasons he felt would make sense to increase my levels of coverage,” said Chris. It was an easy decision, as the cost was minimal given the improved protection it provided. “Since the additional cost was very low to increase coverage, I did so. I feel more comfortable about my coverage knowing my assets are better protected.”

When should you schedule your Farmers Friendly Review?

We recommend scheduling an FFR at least once a year, or whenever a change in your life occurs as this can result in big changes in your insurance needs. A change in marital status, the birth of a child or the purchase of a home are just a few examples of life events that may create overlaps or gaps in your coverage.

Why you should schedule your Farmers Friendly Review today

There are several ways to benefit from scheduling an FFR with your Farmers agent. In addition to keeping up-to-date on the amount of coverage needed and possible ways to save money on your insurance, as a Farmers policyholder, you can be the first to enjoy new benefits such as discounts for alternative-fuel vehicles, pet insurance through Pets Best and experience the Farmers Car Shopping Service through TRUECar.  You can even apply for a Farmers Rewards Visa credit card through your Farmers agent.


Still feel you can’t gain from a Farmers Friendly Review? Even if you feel content with your coverage, you never know what the future holds. A review with your Farmers agent can help identify options to fit your household budget.. Schedule your Farmers Friendly Review today so you can realize the benefits of a full policy review with your agent. You can reach Farmers Insurance - The Wertzberger Agency by calling 913-383-3276 or by email HERE.